2009 (2) TMI 201 - AT - Central Excise

Tribunal Upholds Decision on Food Product Classification

COMMISSIONER OF C. EX., KANPUR Versus SHIVRAJ TOBACCO CO. PVT. LTD.

The Tribunal upheld the Commissioner (Appeals)' decision in a case concerning the classification of 'Chaman Bahar Powder' and 'Pono Cream.' It rejected ... Classification - “Chaman Bahar Powder” and “Pono Cream” - Manufacturer claimed both under sub-heading no. 2001.10 eligible for exemption Notification No. 2/94-C.E – Department classified both under sub-heading no. 2107.91 without benefit of Notification No. 2/94-C.E., dated 1-3-94 – held that - , the use of fruits, vegetables and kinds of plants used by the respondents had not disputed and it can be consumed as such. However, the Revenue while classifying the product under Chapter 21 had taken into consideration only Bel and Amla. In our view, such classification ignoring the other items of vegetables and fruits is beyond the scope of the description of the Heading No. 2001. It is seen that the respondents is mixing all vegetables and fruits to compose Kirana Masala. Therefore, it would be treated as preparation of vegetables, fruits and other parts of plants. The perfumery added with the preparation of vegetables did not affect the characteristics of the product. Issues: Classification of 'Chaman Bahar Powder' and 'Pono Cream' under sub-heading no. 2107.91 without benefit of Notification No. 2/94-C.E.The dispute in this case revolves around the classification of 'Chaman Bahar Powder' and 'Pono Cream' under sub-heading no. 2107.91 without the benefit of Notification No. 2/94-C.E. The Revenue proposed this classification, which was confirmed by the Original Authority. However, the respondents claimed both products under sub-heading no. 2001.10, eligible for exemption under Notification No. 2/94-C.E. The Commissioner (Appeals) sided with the respondents, setting aside the Adjudication Orders and allowing the appeals filed by them. Consequently, the Revenue appealed against this decision.Analysis:1. The Revenue's Argument: The Revenue argued that the products in question, 'Chaman Bahar Powder' and 'Pono Cream,' were not preparations of vegetables, fruits, or parts of plants as claimed by the respondents. They contended that the items were in the nature of pan flavoring material exclusively meant to be taken with pan, rather than being preparations of vegetables or fruits. The Revenue also highlighted a change in the composition of the products by the respondents to avail the exemption benefit, referencing a previous Tribunal decision to support their classification under Chapter 21 as pan masala.2. Respondents' Defense: The respondents, represented by their advocate, reiterated the findings of the Commissioner (Appeals) and argued that the products indeed contained preparations of vegetables, fruits, and other parts of plants. They emphasized that the absence of certain ingredients like lime, katha, or supari differentiated their products from pan masala. The respondents also cited previous orders and decisions, including the case of D.S.M. Fruits Ltd., to support their classification under sub-heading no. 2001.10.3. Tribunal's Analysis and Decision: After considering both sides and examining the composition of the products, the Tribunal found that the products contained ingredients like fruits, vegetables, and other plant parts. The Tribunal disagreed with the Revenue's classification under Chapter 21 and upheld the Commissioner (Appeals)' decision. The Tribunal emphasized that the products fell under the description of heading no. 20.01, covering preparations of vegetables, fruits, nuts, or other parts of plants. The Tribunal also referenced a previous case involving a similar product classified under sub-heading no. 2001.10, emphasizing that the addition of certain ingredients did not change the essential nature of the products. Ultimately, the Tribunal rejected the Revenue's appeals and upheld the order of the Commissioner (Appeals).In conclusion, the Tribunal's detailed analysis focused on the ingredients, composition, and classification criteria to determine the appropriate sub-heading for 'Chaman Bahar Powder' and 'Pono Cream.' The decision highlighted the specific wording of the tariff schedule and previous rulings to support the classification under sub-heading no. 2001.10, emphasizing the inclusion of fruits, vegetables, and plant parts in the products' composition.